Amazon's lending business provides capital to sellers on its marketplace. With some unfriendly terms, smaller sellers are left wondering about their future.
Amazon continues to exercise its stranglehold over small businesses. The tech firm, which has plans in the works to offer financial services to its customers, has built a lending service for small businesses on its platform which only furthers the company’s command over its marketplace sellers. Introduced in 2011, Amazon Lending has provided loans to small businesses selling on the Amazon Marketplace. However, these loans come with restrictions. The company’s lending program may have a simple and fast approval process, but it is only available by invitation. This invitation-only model runs counter to traditional lending, where borrowers apply for funds directly from lenders. By doing so, Amazon skirts any process of having to sift through applications, while designing its own metrics of how to target potential borrowers.